Marinas face unique risks and insurance needs due to the marine environment and assets under their responsibility. This guide will cover the various types of insurance that marinas should consider, highlighting the key coverage details and differences between options.
Marina Property Insurance
One of the most essential types of insurance for marinas is property insurance. This covers the marina’s physical structures, buildings, equipment, and other property assets from losses due to risks like fire, wind damage, storms, and more.
Insuring Marina Structures
Marina structures like docks, piers, buildings, and other infrastructure are often one of the largest investments. Ensuring adequate coverage for replacement costs is critical in the event of severe weather damage. Piers and docks face exposure to waves, wind, and deterioration from the marine environment. Marina property policies should include coverage for these structures.
Insuring Equipment and Maintenance Gear
Marinas rely on various watercraft, vehicles, tools, and equipment to perform repairs, maintenance, and serve customers. This includes forklifts, trailers, skiffs, cranes, and more. Property insurance for marinas should extend to these assets with coverage for replacement in case of total losses. Agreed-upon value clauses can pre-determine payout amounts to simplify claims.
Flood Insurance
Flood insurance warrants special consideration at marina properties. Standard property policies do not cover flood damage, yet marinas are inherently at risk due to their waterfront location. The National Flood Insurance Program (NFIP) offers policies that can help fill this gap. Marina owners should check their eligibility and consider the maximum available coverage from NFIP to provide a critical layer of protection against this widespread threat.
Valuable Contents Coverage
Inside marina offices and maintenance shops are also contents that require protection. Office equipment, tools, parts inventory, and other supplies accumulate significant monetary worth. Contents coverage under a property policy reimburses for these interior assets in an insured loss scenario. Coverage limits should accommodate estimated replacement values and business interruption losses if assets need to be replaced.
General Liability Insurance
A general liability policy serves as the main source of protection against legal claims of third-party bodily injury and property damage at a marina. Such claims emerge frequently due to the nature of vessel operations and activity levels at these properties.
Bodily Injury Coverage
Slips, docks, parking lots – marinas involve pedestrian traffic and various activities that carry risks of falls, collisions and other accidents. Liability insurance provides coverage and legal defense if a marina customer or employee sustains injuries on the premises for which the marina is found responsible.
Property Damage Coverage
Moving vessels, trailers, vehicles, and equipment all present opportunities for docks or other boats to incur scrapes, collisions, and other contact damage. General liability insurance indemnifies marinas if they become legally obligated to pay for repairs from such incidents. This is especially important as boat owners often have high expectations for the quality of neighboring vessels.
Pollution Liability Extension
Spillage of fuel, oil, or other marine-related pollutants happens from time to time despite best practices. Pollution liability under the marina’s general liability policy would respond to third-party bodily injury or property damage claims from such events, absent any negligence by the marina.
Protection and Indemnity (P&I) Insurance
While general liability covers marinas for incidents onshore, Protection and Indemnity (P&I) insurance fills the gaps offshore. This type of coverage protects marinas in aspects of their business involving vessels on the water. Common situations include:
Crew/Passenger Claims
If a marina hires crew members or offers passenger excursions, P&I coverage provides indemnification should any slips, falls, or injuries occur to authorized individuals onboard. Medical expenses for treatment are included.
Wreck Removal
If a marina-owned or chartered vessel founders, sinks, or becomes stranded, P&I insurance finances any legally required removal or destruction of wreckage to avoid marine hazards or environmental damage.
Pollution From Vessels
Fuels, oils, and other vessel-related discharges at sea are covered if the marina becomes responsible for resulting third-party clean-up costs or injuries. Mitigation consultations with response contractors are also provided.
Commercial Garage Coverage
For marinas that maintain vehicle parking facilities or perform mechanical work, commercial garage coverage delivers tailored protections.
Repair Shop Risks
Fueling, paint/body shops, and vehicle repair bays involve unique fire and liability exposures that standard premises insurance does not address fully. Garage coverage defends “completed operations” claims after vehicles leave the shop as well.
Parking Facilities
For vehicle storage, insurance kicks in to cover not only parked autos but also any non-owned autos that a marina staff may use temporarily on premises for moving or rearranging vehicle inventory.
Towing / Roadside Assistance
If the marina provides towing to stranded boats or vehicles, associated liability from towing/recovery operations and roadside mishaps are insured.
Workers’ Compensation Insurance
As required by law in most states, this no-fault coverage reimburses medical expenses and lost wages of employees injured on the job. It protects the marina from bearing the financial brunt of accidents through litigation or out-of-pocket costs. Options exist to fully insure or self-insure based on staff size.
First Party Insurance Options
Further coverage types marinas should investigate to safeguard their operations include:
Business Interruption Insurance
Reimburses lost income if property damage suspends business activities for repairs or rebuilding, helping maintain cashflow during downtime.
Inland Marine Coverage
Specifically tailored to cover watercraft, floatables and other specialty marine equipment in transit or offshore in lay-up. Agreed value policies are preferable.
Cyber Liability Insurance
As point-of-sale and customer data becomes digitized, this protects against network security breaches, data theft, and ransomware attacks crippling operations.
Employment Practices Liability
Shields against discrimination, harassment, or wrongful termination claims from employees. Mediation of disputes is included.
Umbrella/Excess Liability Policies
These provide additional liability limits above the general policy in major loss scenarios where reserves are exceeded.
Key Considerations for Marina Insurance
When shopping for a policy, marinas should ensure:
- Coverage limits are sufficient for replacement costs of structures and assets
- All owned and rented properties are scheduled as insurable premises
- Vessels of all types kept in inventory are accounted for
- Docks, piers at full capacity plus additional property are covered
- Seasonal business needs around boating season or winter lay-up are addressed
- Carrier understands unique marine/nautical risks and has specialized expertise
- All business operations as cruise excursions, boat rentals, repair facilities, etc. are represented accurately.
- Deductibles, premium costs, and payment plans fit the budget
FAQs About Marina Insurance
Here are answers to some common questions:
Are slips or dry storage covered for customers’ boats?
No, a marina’s policy does not insure customer vessels. Owners must carry their own boat insurance. The marina is only responsible for docks and infrastructure.
What about workplace injury claims from boat owners?
General liability would defend claims, but Workers’ Comp covers only employees. Independent contractors must carry their own accident coverage.
Is business interruption coverage needed year-round?
Likely not if the marina closes fully in winter. However, having it during boating season protects income from insured property losses.
Do policies cover gradual dock/pier deterioration over time?
No, normal wear and tear is not sudden. But named storm wind/wave damage suddenly exposing deterioration would qualify.
What about vehicle storage or valet parking services?
Commercial garage coverage specifically addresses these exposures with Auto Dealers or Parking Facility forms for protection.
Why is inland marine coverage part of a marina package?
It insures watercraft, equipment, and other insured property while in transit or dockside during lay-up periods when regular coverage may not apply.
How often should a marina review its insurance program?
At a minimum, annually when policies renew. But after major facility upgrades, expansion projects, or changes in operations, talking to an agent ensures accurate ongoing protection.